Cathay United Bank (
Cathay Financial is the nation's largest financial group by assets.
News of the additional reserves was announced after its shares closed 0.28 percent higher at NT$72.2 on the Taiwan Stock Exchange yesterday.
Cathay United is expected to incur a net deficit of NT$3 billion, registering its first loss since parent Cathay Financial was established in 2001.
This follows the round of extra provisioning to cover mounting bad debts, Cathay United spokesman Joseph Jao (
The bank earned more than NT$3 billion last year despite the fact that it booked an extra NT$9 billion in provisions to cover consumer bad debts.
For this year, Cathay United said it would provide additional reserves of NT$4 billion to cover potential bad debts stemming from a restructured loan program.
Another NT$3.3 billion is to be set aside to cover soured loans stemming from unsecured consumer business.
The decision will boost the bank's annual provisioning cost to NT$32 billion compared with NT$18 billion last year, Jao said.
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